Tether published an official response to an article updated and reissued earlier this week. Two American academics who claim that a single market whale on Bitfinex has likely manipulated bitcoin’s surge in 2017. Tether rejected paper naming USDT manipulation.
08 November 2019, AtoZMarkets – John M. Griffin and Amin Shams are the authors of the document published a weakened but equally flawed version of their previous article. Tether claims that the report is a watered-down and embarrassing walk-back of its predecessor.
Tether Paper USDT Manipulation
The authors’ alleged claims are based on a house of cards. That sustains from the absence of a complete dataset. The authors openly admit that they do not have precise data timing of transactions or the flow of capital between different exchanges. Tether argues that the lack of information means that academics would not be able to accurately manage the sequence of events that led to the alleged manipulation.
Tether also insists that it and its affiliates have never used Tether tokens or token pricing or issuances to manipulate the cryptocurrency market. And reserves fully guaranteed all Tether tokens. Also, they are issued according to market demand. Moreover, this is not to control the price of crypto assets.
Tether concludes its answer by stating that the growth of USDT token issuance is not a product of manipulation. However, it is the result of the effectiveness of Tether, its acceptance and its wide-scale utility in the cryptocurrency ecosystem.
The Market Manipulation in 2017
According to the findings of Griffin and Shams, an unknown party is using Tether’s stablecoin USDT. Also, the sister Bitfinex purse would have manipulated the market in the bull race at the end of 2017. Moreover, that saw Bitcoin hit record highs of over $ 20,000 before suffering a sudden crash. That led to the beginning of winter crypto.
As the Wall Street Journal reported at the time, the article strongly suggests that the big whale in question was Bitfinex itself. If it’s not Bitfinex, Griffin told the newspaper, it’s someone they do business with very often.
Read More: OKEx to launch Tether Futures Trading
Other Lawsuit Against Tether and Bitfinex
In early October, a New York law firm filed a lawsuit against Tether and Bitfinex. Because it was accusing them of using USDT to manipulate the cryptography market.
In April, the Attorney General of New York filed a lawsuit against the two companies. That alleged Tether, which claims to support its 1-to-1 tokens with the US dollar to achieve value stability. Because that had unlawfully covered the loss of 880 million of dollars from Bitfinex. However, that was using funds from Tether’s token-backing reserves.
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